In his studio in the Behlendorf woods, near the Baltic city of Lübeck, Günter Grass reflects on the outcry over his fictive memoir Peeling the Onion. His mention, four years ago, of having been drafted as a teenager into the Waffen SS at the tail end of the second world war sparked the most explosive in a half-century of career controversies. "I'm used to it by now," he says. "What I do is sometimes – at least in Germany – met with wounding campaigns. I always face the question: should I grow myself a thick skin and ignore it, or should I let myself be wounded? I've decided to be wounded, since, if I grew a thick skin, there are other things I wouldn't feel any more."

His bestselling debut novel, The Tin Drum (1959), was decried in some quarters as blasphemous pornography, and banned in dictatorships from the Eastern bloc to Iberia, while his novel Too Far Afield (1995) was savaged by critics, not least for raining on the unification parade. The story of his stint in the Waffen SS was broken in the German press in 2006 as a shocking disclosure, though "it came out later that I'd spoken openly about it in the 60s," he says. "Nobody was worked up by it at the time."

That was in an era turning its back on the past amid Germany's "economic miracle", whose amnesia was assailed by Grass and other writers, including Heinrich Böll, Hans Magnus Enzensberger and Martin Walser – before opinion shifted with the Auschwitz trials and 1968 student protests.

Yet for decades, he wrote in Peeling the Onion, he "refused to admit" to the "double letters" of the Waffen SS. He always avowed membership of the Hitler Youth, volunteering without success for the submarine corps at 15, and being conscripted as a tank gunner at 16, before being wounded, never having fired a shot. Yet, as one of the "schoolboy generation" burdened with crimes he learned of only as a PoW in US hands, he wrote: "What I had accepted with the stupid pride of youth I wanted to conceal after the war out of a recurrent sense of shame." That Grass took 60 years to address his Waffen SS membership in his work might be a reminder of the difficulty of the task he undertook. As his oeuvre suggests, the past is never "come to terms" with, but recurs in a perpetual grappling with responsibility and guilt of the kind that "hibernates in dreams".

On whether he might have handled things differently, he says, "I would have had to write my autobiography earlier. It was portrayed . . . as though I'd made a confession – and even that full of false comparisons. I did not volunteer for the Waffen SS, but was, as were thousands of my year group, conscripted. I did not then know as a 17-year-old that it was a criminal unit. I thought it was an elite unit."

For Grass, his conscription has less significance than the unquestioning beliefs of his youth, for which he claims responsibility, and spent a lifetime "working through" in fiction, poetry, drama, essays and memoir. "I belonged to the generation that grew up under National Socialism, and was blinded and led astray – and allowed itself to be led astray," he says. Soon after 1945, "while many were retrospectively counting themselves members of the German resistance, I said: 'No, right until the end, I believed like an idiot in the final victory.' I was shattered when the Germans capitulated. I never made a secret of it. Everything I have done since emerged as an insight after the war."

Though the "Grass affair" brought attacks on his moral authority, he has never styled himself "Germany's conscience" ("No one person can be the conscience of a country – it's stupid"). Accused of hypocrisy in attacking others' wartime records, he objects: "When I criticised [Kurt Georg] Kiesinger because he wanted to be chancellor, I was talking about a man who . . . during the Nazi-era, had a leading position in the propaganda department. He was no 17-year-old."

A lifelong Social Democrat, though no longer a party member ("I criticise them but I'm still on their side"), Grass sees the furore as politically driven. "I was supposed to keep my mouth shut. That didn't work. I still keep opening my mouth."

The controversy is touched on in an exhibition in Günter Grass House, the Lübeck museum that houses prints, watercolours and sculptures by the 1999 Nobel laureate. It was founded in 2002 in the 15th-century print works where he keeps an office, near a red-brick Gothic cathedral like those in Danzig, his Hanseatic birthplace (now Polish Gdansk). "Günter Grass and Poland", on until January 31, has a newly unearthed photograph from his first return in 1958, clasping his Slav great-aunt Anna, a Kashubian in voluminous skirts who inspired the potato-field conception in his most famous novel.

Later he met the Solidarity leader Lech Walesa, who in 2006 demanded that Grass hand back his honorary citizenship of Gdansk. Grass says he wrote to the mayor, and the idea was rejected. "The people of Gdansk said: 'No, he belongs to us!' I'm there every other year; I'm proud they celebrate me." In 2005 he showed 10 translators around the city on the occasion of new 50th-anniversary translations of The Tin Drum. The English one, by Breon Mitchell – out this month in Vintage paperback – is unexpurgated and more faithful, Grass feels, to his "tapeworm-long sentences".

His studio barn is next to the house he shares with his wife Ute, an organist. Downstairs he hammers on his blue Olivetti, and upstairs makes prints. With his "walrus moustache" and pipe paraphernalia, Grass seems relaxed, switching between German and English – even mischievous. Rehearsing his objections to the "annexation" of East Germany in 1990, he scowls theatrically, "you're speaking with an angry old man", but laughs with good humour. He looked forward to marking his 83rd birthday this month with friends. As for fearing death: "No, I'm astonished with each new spring. At my age, every year is like a gift."

The second volume of his fictive autobiography, The Box, is published by Harvill Secker next week, in an English translation by Krishna Winston. It forms part of a trilogy that took him seven years. Its third part, Grimms' Words, which combines memoir with the story of the Grimms' dictionary, came out in Germany in August.

While Peeling the Onion covered his youth – up to publication of The Tin Drum, aged 23 – The Box, he says, is the "familial part: how my children experienced this father, whose head was always floating in his fiction."

Each volume has an "autobiographical bent" but a "fictional form". He changed the names of the children he has with "four strong women" – four from his first marriage, two daughters with two women he lived with between his marriages, and two stepsons with Ute – and now has 17 grandchildren. "I've always been surrounded by children – never bothered by their noise." Women, he chuckles, may have been more disturbing to his work, yet for 30 years he has lived with "an independent woman who accepts this form of loneliness I need, and who would actually mind if I stopped writing."

The "box" is an Agfa camera with magical properties, which survived wartime firestorms to capture not only memories but things to come. Like the diminutive Oskar's tin drum, it is a metaphor for his art. Grass sees it as a "fairytale to explain to children how fiction works in my mind. Our minds aren't bound by a chronological corset. When thinking and dreaming, past, present and future are mixed up. That's also possible for a writer." His children witness how, later in life, he had to work through the stuff he'd experienced when he was "a boy in shorts". Grass feels a renewed urgency to sift the rubble of what happened, "slowly, deliberately and in broad daylight", as the generations who lived it dwindle. "It's an endless story," he says. "The inordinate crime of the 'final solution' still can't be explained."

Born in 1927, "almost late enough", he is haunted by how narrowly he escaped being involved in crimes: "That I wasn't is not by merit." His parents ran a corner shop, and in the Depression he was his mother's debt-collector. She also fostered the talent that led him via stonemasonry to art college and writing. "My mother liked my fantastic, made-up stories – unlike my father," who wanted him to be an engineer.

Leaving school at 15, he volunteered to fight, partly because "in school, military heroes were our role models, and – idiotic as it was – we feared the war would soon be over. But it was also the confinement of the two-room flat and the conflict with my father."

In Peeling the Onion, he excoriates his boyhood self for failing to ask questions, about the Kashubian uncle executed by the Germans during the war's first shots in Danzig in 1939, or as a "curious spectator" as synagogues were set ablaze. Those, he says, are "the things that still oppress me today".

The Tin Drum was a grotesque satire of those, like his parents, who were seduced by Nazi ideas. "The petit bourgeoisie is politically homeless," he says, "dismissed by the rich and by leftwing ideology. Big industry was the first to finance Hitler; the aristocracy held itself aloof or joined in; the Churches all collapsed. But this abandoned stratum was the mass support." He adds, "I come from that background, and stand by it. There's nothing more repugnant than people who play at being upper-class."

He was shaped too as a refugee. "Homeland is something one becomes aware of only through its loss," he says. That the loss was irreparable "became clear to me early on. I wrote The Tin Drum partly to counter the received view that these lands could be regained. My parents believed the lies of [Konrad] Adenauer, who said, 'If you vote for me, you'll be able to go back to your old homeland'." Grass was quick to affirm the new borders, and was with Willy Brandt in 1970 when the chancellor knelt in atonement at the Warsaw ghetto. "He invited people from the lost provinces – like me from Danzig, and Siegfried Lenz from East Prussia. It was very moving." From the Diary of a Snail (1972) splices Grass's campaigning for Brandt's chancellorship with the fate of Danzig's Jews in the 1930s. His displacement created an affinity with Gdansk's postwar populace – many expelled from Soviet Russia. "My hometown was mostly destroyed, but I met refugees who understood how I felt. We could speak about lost things."

In fiction he could reconjure what was lost, including German dialects. "Nobody speaks Silesian any more; East Prussian is gone. That monstrous loss can never be recouped." His Nobel lecture recalled a "duty to take the goose step out of German", saying the only way to counter Adorno's objection to poetry after Auschwitz was for writing to "become memory". While the generation before him honed a purist language since "German had been injured by the Nazis", his view, he says, was that "one cannot punish the language for having been abused. Even though I had the greatest anger for my fatherland, the unbreakable link is the language. I wanted to go back to its richness."

Writing his first novel in Paris, he found a mentor in the poet Paul Celan, who killed himself in 1970 ("he led me to the German translation of Rabelais"). His inspirations ranged from Grimms' fairytales and the Spanish-Arab picaresque, in whose picaro "the era is reflected in concave and distorting mirrors", to Akira Kurosawa's film Rashomon – "a medieval murder story told from varied perspectives". "There is no such thing as the truth," he says.

Eventually he breached a taboo on the suffering of German civilians. After his mother's death from cancer in 1954, he learned that when the Red Army took Danzig, "My mother was – as I found out from my sister – raped repeatedly when she placed herself protectively in front of my sister, who was 13. My mother never spoke about it, though I tried to get her to speak; it was impossible." He adds: "It was like that for many people. I got to know young Jews in Germany whose parents survived Auschwitz and who have never spoken to them about it. There are things for which one can't find words."

Grass had feared his parents lost on the Wilhelm Gustloff, the cruise ship packed with refugees fleeing the Red Army, which was sunk by a Soviet submarine in January 1945 – the subject of his novel Crabwalk (2002). "This terrible catastrophe in which 10,000 people – mostly women and children – lost their lives, appears first in The Tin Drum . . . but it took a long time to find a literary form for it." Readers told him Crabwalk broke a silence within their families. "Literature has this possibility for people to fasten on to it and then begin to speak," he says. Whereas the "history of the victors has always been documented, the writer can uncover this suppressed history".

The Call of the Toad (1992) evokes the millions of Germans expelled from Germany's former eastern territories after the war. "I make clear that this crime of expulsion was begun by the Germans," he says. "The same applies to the bombing of cities. The German crime was answered with British and American crimes, like Dresden – but that does not diminish the crimes of Air Marshal Harris."

He opposed a lobby by Germany's Federation of the Expellees to create a commemorative museum, "because it was one-sidedly from a German perspective. Expulsion started with the Armenian genocide in Turkey. It was practised by the Germans and repeated by the victors." In Istanbul this year, "I said, 'We Germans, too, found it difficult even to recognise our crimes. Turkey needs time, but it can't avoid opening itself up to the facts.'"

Although some younger Germans chide Grass for an obsession with the country's past, he applies its lessons widely. Victory, he wrote, "makes you stupid." It is ironic, he says, that the "Germans, who lost the war, had the chance – were forced – to think about the past. The winners didn't. Perhaps in time, your country, England, will think about its colonial crimes . . . No country has the right to point only at the Germans. Everybody has to empty their own latrine."

For him, the "west's moral voice lacks credibility. How do we prevent Iran developing an atomic bomb, when, on the American side, dropping atomic bombs on Hiroshima and Nagasaki is not recognised as a war crime?" The Nuremberg trials "rightly sentenced war criminals. But by the same token, the Bush and Cheney administration belongs in front of a war crimes tribunal. That will never happen, so the Nuremberg trials retrospectively become a farce, granting rightwing extremists an argument they wouldn't have had." Yet for Grass, more dangerous than neo-Nazi parties are "politicians in the democratic parties who make a big circus to win votes from the far right – as in the Netherlands, with Islam enemy number one."

On whether his trilogy completes an autobiographical "working through", he says: "Some people want it to be the end, but it isn't. At my age I don't think an epic work is possible. But I will write again, poetry perhaps. Now I'm etching; that's how I regenerate."

He is religious only outdoors, with paper and pencil. "I'm always astonished by a forest," he gestures at the darkening woods. "It makes me realise that the fantasy of nature is much larger than my own fantasy. I still have things to learn."